Question 1

What is an NBFC, exactly?

Accepted Answer

A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act that carries on financial activities — lending, investments, leasing, hire purchase — as its principal business, without holding a banking license. NBFCs are regulated by the RBI under the RBI Act, 1934, not the Banking Regulation Act that governs banks.

Question 2

What is the minimum capital required for NBFC registration?

Accepted Answer

RBI requires a Net Owned Fund (NOF) of ₹10 crore for new NBFC-ICC, NBFC-MFI, and NBFC-Factor registrations under its Scale-Based Regulation framework. This is your own capital, not a fee — it stays in your company as the regulatory capital base RBI requires, and it can't be funded with a loan.

Question 3

What is Net Owned Fund (NOF) and why does it matter?

Accepted Answer

NOF is the owned capital your company must hold and maintain to qualify as an NBFC — RBI's way of ensuring your company has enough financial substance to operate responsibly. Some consultants blur the line between NOF and their own fees; we don't — NOF is capital you keep, not money you pay us.

Question 4

What is the RBI COSMOS portal and how is it used?

Accepted Answer

COSMOS is RBI's official online portal for submitting NBFC registration applications. Once your application is filed there, RBI issues a Company Application Reference Number (CARN) that tracks your application through to the Certificate of Registration.

Question 5

Can a One Person Company (OPC) become an NBFC?

Accepted Answer

Generally no — RBI expects a minimum of two directors and two shareholders, so an OPC structure typically needs to convert before it can register as an NBFC.

Question 6

Can I convert my existing Private Limited Company into an NBFC?

Accepted Answer

Yes, provided it meets RBI's eligibility criteria — this is a common route for existing businesses looking to enter financial services, rather than incorporating an entirely new entity.

Question 7

What is the difference between NBFC-ICC and NBFC-MFI?

Accepted Answer

NBFC-ICC (Investment and Credit Company) is the standard general-purpose lending and investment category. NBFC-MFI is specifically for micro-finance lending, with its own qualifying-asset and lending-terms conditions on top of the general NBFC requirements.

Question 8

How long does it take to get an NBFC license from RBI?

Accepted Answer

Most NBFC registrations take 4–6 months end to end. RBI's own due-diligence review is the largest single stretch of that timeline — the biggest lever you control is how complete and well-documented your application is on first filing, since every clarification round adds weeks.

Question 9

What are the different types of NBFCs?

Accepted Answer

NBFCs are categorised by the activity they carry out — Investment Company, Loan Company, Asset Finance Company, Infrastructure Finance Company, Core Investment Company, Micro Finance Institution, and P2P Lending Platform are the common categories. Separately, RBI also classifies every NBFC into a Base, Middle, Upper, or Top regulatory layer based on size and risk under its Scale-Based Regulation framework.

Question 10

Does every financial-sounding business need NBFC registration?

Accepted Answer

No. RBI's definition of an NBFC excludes companies whose principal business is agriculture, industrial activity, goods trading, general services, or real estate. It also applies a "50-50" test — a company is only treated as an NBFC if more than 50% of its assets AND more than 50% of its income come from financial activity. Some financial businesses, like insurance and stock broking, are licensed under a separate regulator entirely.

Question 11

What's the difference between an NBFC and a bank?

Accepted Answer

NBFCs can't accept demand deposits, issue cheques, or participate directly in payment systems like NEFT/RTGS, and deposits with an NBFC aren't covered by DICGC insurance the way bank deposits are. In exchange, NBFCs operate under a lighter compliance load and can take up to 100% foreign investment via the automatic route, versus tighter FDI caps for banks.

Question 12

Should I register a new NBFC or take over an existing one?

Accepted Answer

A fresh registration gives you full control over structure and governance from day one, but runs on RBI's 4–6 month review cycle. Taking over an existing, already-licensed NBFC can be faster once due diligence is done, but means RBI approval for change in control and inheriting the target's compliance history. We advise on both paths.

Question 13

Can a foreign company register an NBFC in India?

Accepted Answer

Yes, subject to FDI policy and FEMA regulations applicable to the specific NBFC activity. Foreign investment in NBFCs generally requires additional structuring and compliance — we advise on the right approach for your entity.

Question 14

Is it mandatory to have a physical office for NBFC?

Accepted Answer

RBI requires a registered office address as part of the application, along with proof of address. The specific requirements depend on your business model — we'll confirm what applies to your case.

Question 15

Can I use a loan to meet the capital requirement?

Accepted Answer

No — RBI requires the Net Owned Fund to be genuinely owned capital, not borrowed money. Contributions from family members are generally acceptable as personal capital, but the fund itself can't be built on debt.

Question 16

What are RBI's "fit and proper" criteria for directors?

Accepted Answer

RBI expects NBFC directors and promoters to have a clean legal and financial record, relevant professional experience, and no history of regulatory action against them. At least a portion of the board is typically expected to bring prior experience in financial services — we assess your current board against this before filing.

Question 17

What are the compliance requirements after NBFC registration?

Accepted Answer

Post-registration, NBFCs must file periodic regulatory returns, maintain board governance processes, and keep fair practices and KYC-AML policies current. We manage this as an ongoing compliance function so nothing slips through at year-end.

Question 18

What happens if my NBFC application is rejected — can I reapply?

Accepted Answer

Yes, you can reapply, but a rejection typically adds months to your timeline and can affect how RBI views a future application from the same promoters. A thorough review before submission is the best way to avoid this — see the common rejection reasons below.

Criteria	NBFC	Bank
Governing law	RBI Act, 1934	Banking Regulation Act, 1949
Demand deposits	Not permitted	Permitted
Cheque issuance	Cannot issue cheques	Can issue cheques
Payment systems (NEFT/RTGS)	Cannot participate directly	Can participate directly
Deposit insurance (DICGC)	Not covered	Covered up to the insured limit
CRR / SLR requirements	Not applicable	Mandatory
Foreign investment (FDI)	Up to 100% via the automatic route	Capped and conditional (varies by bank type)
Minimum capital	Net Owned Fund of ₹10 crore (most categories)	Separate, materially higher RBI capital norms

Criteria	Register New NBFC	Takeover Existing NBFC	Plug & Play
Own RBI CoR	Yes	Yes	Depends on structure
Time to market	4–6 months	Often faster, post-diligence	Often faster
Capital requirement	₹10 crore+ NOF	₹10 crore+ NOF (existing entity)	Structure-dependent
Legacy compliance	None	Must be assessed	Depends on model
Best for	Full control, building your own brand from zero	Speed, willing to inherit and audit an existing entity	Starting to lend without committing to full ownership yet

Feature	Typical Large Consultancy	Bharat Cred
Point of contact	Passed between sales, operations, and support teams	One dedicated point of contact, start to finish
Pricing	Quoted only after several calls	Scoped and discussed upfront, before you commit to anything
Eligibility & cost estimate	Submit a lead form, wait for a callback	Instant eligibility check and cost estimate, right on this page
Regulatory content	Generic marketing copy	Written by the team that actually files this paperwork
Proof of work	Star ratings and review-site badges	Named, readable case studies — not just a rating widget
After the license is issued	Handed off to a separate team or contract	Same team stays on for ongoing RBI compliance

NBFC Registration in India — Expert RBI Licensing & Compliance Support

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What is an NBFC?

Types of NBFC We Help You Register

Which Regulatory Layer Will Your NBFC Sit In?

Base Layer

Middle Layer

Upper Layer

Top Layer

Do You Even Need NBFC Registration?

Not a Financial Activity Under RBI's Definition

Already Regulated Under a Different Framework

What is my NBFC Eligibility?

Download Free NBFC Registration Checklist

Our Proven 8-Step NBFC Registration Process

Documents Required

What Does It Cost to Start an NBFC?

Timeline for NBFC Registration

NBFC vs. Bank — What's Actually Different?

Register New, Take Over, or Plug & Play?

Why NBFC Applications Get Delayed or Rejected

Incomplete or inconsistent documentation

Insufficient Net Owned Fund

Weak or generic business plan

Director eligibility issues

Poor promoter credit history

If your application is rejected

Operating without registration

Why Choose Bharat Cred Solutions?

Frequently Asked Questions

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